Controversy over non-extension of terms of Army officers; NRB: Nepal’s domestic economy facing the impact of the global economic downturn; China to help connect Lhasa with Lumbini, through Kathmandu
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  • Reports noted that the Nepal Army (NA) and the Ministry of Defense (MoD) were locked in a tussle over the issue of the retirement of 8 Brigadier General’s. The MoD on March 16 had refused to extend the terms of eight of them and it did not forward the CoAS’s recommendation to the cabinet. The issue has acquired political overtones with opposition parties’ criticising the government on the decision. CPN-UML General Secretary Ishwor Pokhrel stated that the government’s move “could affect the peace process1.” NC leader Ram Chandra Poudel noted that the “decision would create a vacuum in the army and lower the morale of the security agency2.”

    The Nepal Rastra Bank (NRB) in its mid-term evaluation of the monetary policy for the current fiscal year pointed out that the declining number of tourists and outbound Nepali workers were early warnings that the domestic economy has started facing the heat from the global economic crisis3. The number of Nepali workers leaving for foreign employment for instance, during the first eight months of the current fiscal year, had decreased by 17 percent4. The ADB however pointed out that despite the global economic meltdown, Nepal’s economy expanded by 5.6 percent in the fiscal year 2008, an increase of 2.6 percent over the previous year. It also projected that the Nepalese economy would register a GDP growth rate of about 4.5 percent in 2009, based on a strong harvest of 4.5 million tons, which was the highest in the last six decades5.

    The visiting Chinese Assistant Minister for Commerce Chen Jian assured Nepalese Prime Minister Prachanda that Beijing would extend the rail connectivity from Lhasa in Tibet to Lumbini, through Kathmandu. Both the leaders also discussed various issues like water resources management, construction of the outer Ring Road in Kathmandu and steps to enhance bilateral trade. Prachanda sought Beijing's assistance to minimize Nepal's trade deficit with China and waive tariff on some 300 Nepalese items to enable Nepal to increase its exports to China6.

    In other developments, the UN High Commissioner for Human Rights Navanethem Pillay on a visit to the country called for fulfilling the “demands for justice” and for “accountability for past,” so that the peace process was not jeopardised7.